Earnings call transcript Q1 2023

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Operator

Good day and welcome to ProPetro Holdings Corporation First Quarter 2023 Conference Call. [Operator Instructions] Please note that this event is being recorded.

Now I’d like to turn the call over to Mr. Matt Augustine, Director, Corporate Development and Investor Relations. Please go ahead.

Matt Augustine

morning. good and you Thank We appreciate today’s participation in call. your Executive Sledge; President Chief me Chief today Officer, Sam Chief is Munoz. and With Financial Officer, David Officer, Adam Operating and Schorlemer; for morning, the This our released earnings first of XXXX. we quarter results make Litigation Please today’s projections Reform future are Act. call for by covered on forward-looking note expectations comments statements our the regarding any events that we or Private Securities

the can of cause discussed factors are directly to Forward-looking results We are risks measures in several which many are certain risk to during uncertainties, These financial expectations. beyond comparable today’s subject our materially with we statements included earnings in and and to the non-GAAP review differ and SEC. these Also uncertainties most actual to current our release from control. our filings of measures. risks our GAAP our reference will earnings Reconciliations release. listeners advise call, measures non-GAAP

session. we Finally, after remarks, prepared our a will question-and-answer hold

turn to With like call Sam. that, to I’d the over

Sam Sledge

Thanks, Matt good morning and everyone.

first an ProPetro. XXXX to start was exciting of for year the The quarter

results, Before covering like through you our I’d David recent financial key to some begin accomplishments. walks by

our repriced To substantial of a we active start frac both and percentage fleets. off year, the repositioned

and ago, already set a earnings great last just we during chip has portfolio believe blue beyond. mentioned XXXX customer numbers. As our this foundation showing our We success a this few January call in months was through more in diversified for

see which for has to tailwinds great our provided of XXXX, and power. is company’s continue We integrated of from earning our in fully acquisition Silvertip results now November significant

our companies This in exceeding dual our fuel make sixth the same of acquisition operational than diesel the We our fleet offerings. we to DGB progress At in this record of we profitability. initial Tier synergies first was to and fuel and about the as the took operating evident is more expect our delivery coming anticipated. the legacy confident transition quarter Silvertip revenues our have move were we first equipment time, months. quarter While to of initially expectations, and delivering two delivered between X continue with seventh significant dual electric in the Silvertip,

to also for our the first fourth second, and e-fleets. third are in secure quarter third electric delivery to two fleets expect working We the of take contracts and

Additionally, early of about while optimization talked we that have on and have are we achieved prior life still calls, in wins, big stages the efficiencies our several foundation extending we the including components improvements also therefore, and sustain reducing improve time. second expenses half of year. turn this to key maintenance on into reducing us give while equipment the the These will program

It truly to ProPetro for has a benefits began realize at we tremendous us of been the as here our quarter rewarding strategy.

have we business resilience strengthen the taken year, our last that to long-term. a of an building strategy the will intentional the Over approach for

the pleased are have we we stopping progress we are While made, not with here.

We benefit on will a shareholders, years continue goal our to community. our that to of employees and of our for our and our customers, company volatility the come to competes building advance reduces

all assets use of fleet X of under equipment underscores our this of made will year, equipment globally years, the completions weakness creating still to environment. so source that near-term step in the our are to burns primary natural future why this end we recent hydrocarbons believe including in discuss multiple gas the frac price supply, further to-date Despite cycle. investments take for our gas like approximately back energy gas and we remain next-generation would success. age. I uncertainty, of fear remain under years and and the headwinds, a demand By will and now important a structural This natural broader fuel that two-thirds as belief oil likely have a so with especially of and longer-than-normal

chain don’t experiencing offering, attrition, experience from from our are of of the Basin capabilities. the our demand That customers and sizes across of peers and to supply gives ongoing competitive we that basin. combination allows said meet the clear competitors these coupled bifurcation the all advantage are the success steps us The share in a equipment Permian This in premium with puts next-generation us has equipment recent and constraints strong the that efficiencies confidence fleet with in This strategy, existed OFS service and our improve a space conjunction more across in to and the market and pricing protect bifurcated Accordingly, actively that history. a taking us transition offering. gives we a discipline in business. on

are result leaning into before, propel through methods, heard our operating competitive today, the and the are set of industry of you of mindset higher. future This for providing for in which are needs next fundamental costs customers, shift more many to the business and As than of we space. lower manifest we say operating us adapt and service have will as therefore, to industrialization industrialization Energy service we forward operating Permian this focused it even already industrialization several the is. this on the American happening that will already us confident different be The of making push efficiencies companies even their opportunities our Basin will

without to results major possible none and all time the tremendous thanks for this continued team work course, to our our Of talented of time continue for would hard and ProPetro our deliver who company, dedication. A again. be team

our quarter will that, over David David? discuss first the turn results. With I call to to

David Schorlemer

morning, everyone. and Sam Thanks, good

in the EBITDA and remainder strategy at cash in of and financial margin into X and emphasize the for of the is dive and a income the over year services team of We is catalyst performance, in, strategic evidence adjusted our future our support the to net is first enabling this would our the flow ProPetro. best our our and like I hard pursuit appreciation Before members’ years priorities. of work also throughout our team to work field commitment quarter through is improved generation believe work. I doing to The new

our results. financial to let’s quarter Now, on move first

increase XXXX, revenue, increased of of the Silvertip’s million quarter million $XXX $XXX of pricing attributable to first effort across we the This of XXXX. fleet frac quarter was in and in the undertook largely lines, the XX% revenue contribution generated full effect we improved fourth service the quarter from a of repositioning increase the our During net fourth XXXX. utilization, generated quarter

of at effective fleets utilization of the was for Our fleet of to fleets. frac of ‘XX our top XX.X XX.X prior XX.X first end quarter the guidance

committed second leading field the steady customers of fleet effectively mentioned, our through frac Sam out who and ‘XX. value expect programs with performance. fleet industry sold We utilization our efficient positioned appreciate as And completions and strategically and remains quarter

quarter for and utilization in XX fleet cementing is XX to well. with steady guidance frac as second activity Our businesses fleets our wireline

does strategy These frac replacement market Additionally and be and equipment with the in in the XXXX. fleet service. Tier not XXX,XXX scrapped transition X capacity net plan not during expand conventional of company’s accordance horsepower to retire retirements we diesel and that hydraulic will to approximately will return

and fluid capital like Before change we X, record that after an we components XXXX include would these the analysis January the expenditure. expensing numbers was began was earnings, of costs effective XXXX, for prospectively, rather do to implemented to and fluid operating made ends company prior for useful ends. impact not periods note expensing discuss life to that This discuss ends utilization expense than the to as fluid I an of or present of

the Moving for and versus our first was quarter the across with $XXX of of on, a $XXX full of activity effect Silvertip. driven by in the and cost the of lines amortization service million depreciation of quarter fourth excluding XXXX, XXXX, services, level increase million higher quarter

other $XX expenses, bonuses million reimbursements, or to of First quarter. the prior quarter. and million and and G&A severance items, including in general settlements, of legal in million, compensation quarter administrative $X $X X.X% as $XX was expenses compared compared retention of prior excluding and revenue million including million to transaction non-recurring totaling $XX expense, expense insurance stock-based non-cash revenue items X.X% was the

Depreciation the of the million The our is on in range we the and the in going in amortization with disposal of this to cost services, disposal which was the not normal quarter, Loss quarter was to fluid in on increase attributable D&A $XX will end changes fire resulting and earlier. in and earlier damage along million Loss reported was of cost, depreciable forward. be lives decommissioning $XX assets. related as disposals. from in course for impact other we depreciation expensed million include and quarter, equipment be $X of certain which mentioned to expect first equipment now will

increased highest of were basis XXX adjusted company’s or XX%, performance per again, with $XX deployment just strong the $X.XX company income the compared share, years executing XX% asset was EBITDA $XX in $X.XX expanding sequentially a diluted by in X EBITDA income of over in sequentially of Adjusted with Adjusted million the showing adjusted incremental revenue, company’s EBITDA disciplined very margin potential in quarter of to The prior and $XXX over margins powerful share adjusted highest and EBITDA our margins compared XX% per quarter. when diluted net nearly million X $XX over to approximately or net EBITDA also earnings fourth or million the million posted years. points, strategy.

talked equipment Silvertip our returns our on our Sam pillars, recent reflect transition To our capital-light strategic the earlier, this reiterate fleet and about optimizing results focus and the our what including business, from quarter acquisition.

repricing coupled led efforts enhanced focus, driving disciplined Additionally, profitability. this strategic to with strong our margins,

free million $XX of capital timing receipts due of differences our figure activities, Actual was in capital $XX as the flows the net the million. first cash to expenditures, incurred we investing million, quarter This with for statement expenditures. quarter, of in of and the CapEx shown in cash disbursements. of During negative differs used in incurred from $XXX number flow cash proceeds

we previously program. pursue our profile, capital-light down guidance strategy provided reaffirming conversion winding fleet our coupled developing CapEx are ongoing more substantial with We asset the reinvestment a cycle as and of of our our

this We XXXX in cash between second $XXX million this continue meaningful half front weighted year. $XXX free contribute to to and anticipate the towards of of be turn, million to to cash expect half flow we XXXX. the CapEx In our

are fleet Our programs. for bifurcation capital value By next these years and of Sam our the making ongoing technology, in in more completions investment generation equipment laying groundwork for our services customers earlier the plan, at discussed deliver excellence along ProPetro. with field leading the continued assets to and reliability performance their driving and investments

experienced our strong we quarter, while remains capital execution of capital sheet expansion our strategy. the structure, during to balance position support working some and our liquidity Regarding

was the facility capacity liquidity ABL total million As credit cash credit first available of of March quarter ‘XX $XXX $XX end of XX, borrowings the of under was the our $XXX Total million cash under and ABL were million. the $XX and XXXX, facility. million, including at

$XX was X, balance million our of we As and under cash million $XX liquidity. our ABL borrowings XXXX, of $XXX May of had total and million

with along lower capital second enhanced into improve, half to continue the to liquidity our profitability this our we move expect year. We of spend as and

come. Looking to develop ahead, the company us customer contracts the electric strength long-term This gas-powered of commitment our capital-light and our will accelerating that fleet certain capital discipline a that architecture value-enhancing balance install share for to long-term lease agreement our and benefit these equipment, assets. transition natural and years strategy commercial costs with to for enabled to sheet coupled includes has capital

execute Additionally, Silvertip these evaluate, accelerate performance. of acquisition integrate capability. cash successful strategic identify, our free our we continue strengthen attributes of and subsequent partnerships. capabilities are to integration The strategic transactions year Together, pursue accretive last flow and a will to and strategy evidence this and

turn call Sam. And I that, will with back the to

Sam Sledge

focused quarter first you on behind can Thank us, are we started. strong you, executing just highly getting our we I remain assure strategy, David. that a and With

a compete focused continue us We top natural slower a end the the This at pace market. time, are we of at to bifurcated continue and electric M&A equipment. transition allows completions although to opportunities position strengthen frac oilfield as company. our to our gas evaluating burning services accretive and play fleet, to At same will the to leading

As are environment. on including macroeconomic to effectively and before, headwinds uncertainty industry-wide said brought broader potential we’ve by manage weaker and of we the volatility, challenges continuing natural near-term the prices gas

to services sector and the we remain time, approach that the sustain allow disciplined us entire volatility. of economic create predictable can the and will space at a oilfield that more industrialized Importantly, through optimistic more better same cycles

what is and by our bifurcated that industrialization for ongoing like industry we our the moves Supported and We separates is strategy this necessary to mentioned look approach near we disciplined long-term. to executing the I steps transition. achieve take on the through this that especially Basin, within own and are forward our tremendous to our peers, in to of from e-fleet us opportunities confident well the ProPetro earlier, business, ProPetro and in positioned the we our evolution Permian advantage take see continue

as American we ProPetro, great key in System. At pride to role contributor also Energy the a our take

to community power Permian Our and is Basin the in world. company and dedicated that safe dependable our fuels the fossil producing

role integral progress in to industry As role it been fuels plays will and continue an world’s for to communities, deep industry, vital gas industry needs the we life. in essential critical advancements future. is to the value in and ongoing we energy our the chain Fossil the have important a in security our We and the foreseeable our to believe our promoting others thanks human national in plays meeting innovation. be for for growth. they part And to in supporting invest grow build appreciation continue us to everyday and upon the join oil economic

working about educating committed critical to we the the promote can contributions for By to and importance for we sustainable of forward, society. industry ensure bright and for communities, others our move future our to our our local its world. we a and industry, country together As advocating are

like the forward I’d to our the Lastly, move strategy. for leadership to their our safety to with team work once and continued to continuing team commitment again performance give entire and ProPetro hard confidence thank

pushing. Let’s keep

With up now to to it hand the open to like questions. that, I’d operator for

Operator

Thank Please Barclays. will Instructions] First go Podhaizer, from be ahead. you. [Operator Derek question

Derek Podhaizer

Hi, guys. good morning,

Sam Sledge

Derek. morning, Good

Derek Podhaizer

I to your case the I wanted North today. just America – thoughts So on get bear

be declining, the their management in side activity overconfident on are which up view to are might too results completion half well sell of in counts Investors in lead rig So and estimates the would back resulting half high. teams some back the of the year. drying

year? count seeing market the half all overestimating not and that back you’re level Just position frac take on your why just rig of wanted decline in view of of to maybe you how get the this and the the from in we’re your your insulation a, the

Sam Sledge

the Sam. there. fleet control in North frac can America. Sure, A activity across there terms few broader question. Great Derek, is not things of it’s we lot One, a rig

As we’re you excuse our of That outlooks. Permian said, business in also have us that best of XX% the follow here on sitting Basin where most me consistent know, right we’re know top of operators some and focused as the focused people that many that, over closely, – is blue the chip today. – activity with

is portfolios saw gas the see amount what most with happen good point to nor clean really And crude data for activity quarter we our the talk So maybe within. operate about of in time. a natural reeling any our in we customers’ we prices that first and activity didn’t changes to

So services scenario. business. will be same of type That’s follow information pretty We to the North the the in are of or insulated completion predict. help half closely our volatility America we not to necessarily said, and the do of job plan do there year? one more our That that to companies second forecast in think downside maybe well most we you

Derek Podhaizer

to of pressure dislocation maybe conversations you some with make pocket this side? some then I the trying that e-fleets some But color. Permian, the they helpful given of of that’s we’re seeing, have a that your least pretty you And had these color about customers the customers just Just the No, coming air are more some some of on to I on more to dynamics into pricing? supply have guys seeing your your situation, basis, it. Got spot all talking of pricing and we’re are you win-win hearing much dedicated. come market the the you at about guess know around that near-term maybe just it

Sam Sledge

was saw minimal. that really I very quarter lull the we that in What first Sure. earlier mentioned in

We our customers, if have spot are operations. operating customers, – our market. complex the that most don’t in And not all of of large, operate our customers they even

a So operations. their standpoint pricing the on so data limited is they fleet continuity in which own they consistency from are because of gather, say, availability laser-focused the or rather and

been quite has that, spot hit to the to Next there a market.

second be seen here more has that that it spot focused. the of cycle happens results you’ve some that and the And like recently a of was when that in the relatively think our that’s I in market and activity that spot may peers maybe U.S. the are matures it what market the in overpriced you’ve of the much seen out front in of rest absolutely of changes pricing data of Permian market ran the a haven’t coming remarks seen think the second across the bit nor little into doing that, half us quarter profitability in what is we’re near-term. our you have the of scripted the that our point, our of you lot first seen peers a going a of we or here quarter of or which bleeds from materials spot in in that from into any kind

David Schorlemer

The these upgrade repositioning customers is Derek, this would and utilizing thing that of David. our other is fleets. to fleet they add providers their well some was as based were I on wanting were just of some frac

tell benefits our they customers. crews, that fleets the what as that talk And is in are the because do Silvertip something going more you a can ProPetro field. tell efficiency not stages investors, know we’ve into operate another talked or So great this lot to we comments, going want putting to only to ProPetro’s as on. anecdote they that, because ground, comments, but bifurcation to plays they be I such my And frac with you them, and the Sam’s about, we the hands that example us they provide into are and

where and delivering bifurcation lot ProPetro. for plays of a that value are – out we So that customers see that’s

Derek Podhaizer

Appreciate Great. turn will you, color. Sam. you, Thank back. it the I Thank David.

Operator

Thank you.

ahead. at Next Kurt question Benchmark. will go from Please be Hallead

Kurt Hallead

significant frac my But the Maybe initial that’s that has of really do and economics base, following you in the I Permian understanding of be guess, decline and community been overall. a respect year, transition and particular, is of activity upgrading interesting probably supported case can that you on still and to price today, see The the a or bifurcation, of out question, anticipating for to rapid laid kind tell in take. things oil right? asset customers the the differently, me, clearly, it – give have. this investment roughly you bulk an the Sam, Hey, your in with here at you half where the

being going skittish? – give the So know from base customer you what they to some can don’t what’s now? of And I your forward? expect get going starting happen what what they headwinds? your – on to base, Are are hearing these consistent a customer are on lot Or they insights macro on with us pretty given psychology you of

Sam Sledge

question. Great Yes.

can back I’ll think the like that lowest your of I lowest take across the parts try almost Permian of work all. with that Are and here all we few at sit the this of cost sophisticated goes I a as and type some type David’s acreage back some bifurcation of No, today. these the to question. customer And we with, Most Basin. operating of about of kind really large customers answer to have different not our costs customers Tier is here, our on kind to of portfolio activity comments X that of and of blue chip No, skittish? of produce

our more the a know can they most activity. So protect premier some me and goes produce oil that customers, of will what might Permian than the and portfolio us continue just I’m you that to customer be well if because say positions I’ve stays our sure that to mentioned. most of I price consistent in being a things fits better really our lot already than that lower. probably our can acreage of pricing oil operations able – terms of price the for not group the of What due to

of keep gas. a now, time lower. bifurcation it’s producing for materials natural The puts scattered theme again gas offering our frac a save. more The to than this operating you this other throughout lower a it’s big a this another it really also is – to money more a That’s burn, you of equipment thing more make all really, on is through that burns scattered morning and all this that lever position us whole costs equipment We’ve in into probably time pull transition And mentioned return. year more and deal. the higher to it natural and

into and more cost these having recently, in makes next evidenced here we’ve natural towards able fleet competitive volatile being that more a burn and gas, majority us and half environment. of as price and we’ve done what we’re back what this of So by our going invested uncertain to in year, headed year

Adam Munoz

work majority Kurt, just we of we with together, a value is safely Yes. conversations add as the our focused to the into our how comments, would this have been Adam. more future of that move just year. together can I of customers create continue more Sam’s months around to

been and our So on that’s with hearing focused really we’ve what customers.

Kurt Hallead

Great. That’s great color.

your So adding right, I more coming. a curious, about you’re to you of a as and fuel contracts potential e-fleets was dual seventh as comments couple e-fleet going three soup be of then kind fleet referenced of well here

So referenced you those too, what the answers you that are I kind the wonder sharing if context because be give discussions. that, here capital with the the if cost terms are in some insights in us looking of you And e-fleets, on commentary, you of were of customers customer that But that contracts your these your having timing? skittish, too. assets. wouldn’t could at question, for

Sam Sledge

A of there. Sure. things couple

the make leasing is a the upfront expensing capital what we’ve have when our to done for leasing we a what upfront been these producing and our with the of. that be where and fleet parallel manufacturing and to program mainly ProPetro alongside has make operating or the that the our like cost that well company alignment efficiently four then executed look traditionally revenue-producing operate It us, QX of taken a is towards for equipment comments kind for fleet. the earnings this incentivizes customers on that creates those we’re producing and sure also slug so is across come the own to comment just capital revenue the more it’s care It about into moved running partner E-fleets you chain structure equipment the costs, going that think this e-fleets, three a this model future. capital a that’s e-fleets, capital-light that of two architecture steady, into commercial with do story of about we’ve fleet value hopefully buys of We from it When the we’re us think third future and a our beyond excited in we I really allow out sharing really, in bit transition provides that more some of late smooth spend the quarter. should standpoint. to more honestly commercial a revenue of more XXXX.

Kurt Hallead

great. Sam. it. Appreciate That’s Thanks,

Operator

you. Thank

Next question Mitchell, Partners. Sean Energy be ahead. go will Daniel from Please

Sean Mitchell

you’re for one you’re question. And the can, number in that about of later expand kind earlier of this outperforming one? back sold. you of maybe, is not the be market the talking sure driving or guys. talking I your is Sam, if my Silvertip fleets taking what want you Good then kind this on call, you of second Any morning, think make is whatever, kind color Thanks talked to expectations. I retirement just going maybe in around stuff’s or year, that but scrap mentioned equipment horsepower to the about going that? just can to you

know. to someone going potentially else’s hands, in want back work it’s I what is So to really

Sam Sledge

over we fleets. on of in question just answer inside add virtually that would XX,XXX fleet I on previously fire the that to And retirements. horsepower on announced second that your is that year. the That’s lost we this Yes. there a Easy three little

Sean Mitchell

Okay.

Sam Sledge

to the auction Sean. of is you going on see or the in any block and cut and parted But yes, market. up equipment This right, basically you are out exactly else get this anywhere won’t

is on this horsepower So a the pure retirement amount.

Sean Mitchell

hear. Good. Good to

Sam Sledge

others Which healthy reappears the market, doesn’t produce or we frankly same for The value if it. it that would do is encourage we is the thing. not produces it worth just to obviously and think

the frac seen we more synergies we few fleets. Silvertip I have say operational of with near-term the units has that some outperformance what would more been question, Silvertip pairing On ProPetro call a

So, them Silvertip frac those maybe paired get with on we peers more our some inefficient units a away and the from get operation. efficient we ProPetro of side,

of We more we forecast some side, also pump down some able share to the high-quality necessarily for on that are have our found Silvertip pump-down upfront wireline crews. synergies wireline services where provide and equipment didn’t ProPetro to alongside

that outperformance. of also part the So, was

Sean Mitchell

for it. Got the color. Thanks

Operator

Thank you.

question from Markets. Please Next Capital be Syed, ATB ahead. will Waqar go

Waqar Syed

Thank accounting? assets you for on Yes. comment disposal changed, running in to $XX you substantially though taking my the the loss you for And CapEx expect do you a is guidance changed questions. come have on Why it the now then could The practice. with that? even accounting been that, around hasn’t million change quarter, of down

David Schorlemer

up our statement of Yes. were we wanting to clean disposal, is income The loss Waqar, our this a bit. David. on we forward. And part to do expect come down analysis, going

we why remarks. made our that that’s So, in comment

somewhere of million retirements should play have coincide dispositions we $XX as I they assets. and out be will other and any think of the it that inside with

ends, forward. provided accounting and at we Regarding a we that just this fluid using is our CapEx, the suggest going number guidance best that for based revised on would time our estimate

Waqar Syed

with Are planning you knew you somewhere you set – going were increasing spending accounting? you to or the already not in changing you change budget, else when previously this be that it that are accounting, CapEx was

David Schorlemer

process the and analyze accounting to determination. continuing been our had We

your providing So, we down we for are time. the forward going had sticking models. But think suggest is I we that particular not what guidance that would with today at nailed

Waqar Syed

on everything you any a do crews dedicated right then is And now Sure. have on spots basis.

Sam Sledge

going you semi Well, dedicated spot, Waqar, fleet. but with one are this it’s is Sam. crew private operators I that could that would there say say basically maybe share is a technically, full to

hesitate So, call I would spot. wouldn’t to even even – that I

So, dedicated could this confidently say I portfolio. is think XXX% we

Waqar Syed

in of the a other come Okay. like couple how are have many have kind last you of in the right And months in and do from of crews market sense basins spot now?

Sam Sledge

guidance Hard to off knocks mean and combined outlook, outlook and answers, hand we our kind sure a seen you are any said, we in that’s have – right. That given. pressure of Permian. many and the just larger count maybe to fleets what hard think to of really some And of said our of significant our previous count like it’s we not our peers, us some not of are to earlier we say. they watch guidance peers that are if that we need point, healthy basin-to-basin, fingers of positive they coming even larger how on have data I our doing even couple the one a secondhand moving peers on

many of larger specific in the to and oilier basins our that over entire moving We probably the XXX for it’s of about market frac from basins, single fleets. that’s digits peers fleets numbers gas have talking maybe are

like lot feels it right disciplined allocation asset country now. a behavior and across the around more So, pricing is there

Waqar Syed

Well, thank much. taking for questions. Thanks you very my Okay.

Sam Sledge

Waqar. Thanks

Operator

Thank you.

Don Next question Crist Johnson Please of from will be ahead. Rice. go

Don Crist

your own into you of kind ask other the system, okay fleets secured into Can gas wanted unreliable. Sam, their gas your Good to where of in about of are fleets have you kind about I gentlemen. deliveries need morning supplies fairly gas deliver kind question to a you supplies to talk because are the of delivery and couple DGB larger move space. peers the they as of businesses to you move if A there? your

Sam Sledge

at how maintenance question. cost. operationally efficiency, here like this diesel each recent We in abilities that more part to hard pretty natural fuel it we industrialization do fuel months has pressed to on about And lower of just at our effective of to our effectively big a supply the is more A equipment. broader Great us quality efficient talk that ability operationally location, more sector big, a things hear and to around that displace the equipment being you sourcing adequate, lot timely definitely plays been just and piece our we gas. that And distribute fuel operationally how individual of equipment. our with work to theme

from at something am there. we are have standpoint, team To locations. done of your that’s work really, We integration So, think edge really of that I diesel an answer more that question individual proud something would on we displacement the I on directly, is has looked our yes. that the this say, leading

understand offering of protect closely a to need a amount doing financially. be arena to to know will Our you bring to partner But also to we work yet And like out if we our value consumes something in to electric we natural performance more electric with. considerable opportunity it that own or we gas. open one, to that online, once and its eyes don’t as that’s are importance to operational need figured create continue do to are well. fleet and just if lot that it I that wide of of things chain that vital DGB value very importance what

behind e-fleets. So, it’s have a good those to gas important natural chain fueling value even more

there. stay So, tuned

lot looks for exactly know We are we a that what us. but doing like of don’t it in quite work yet arena,

Don Crist

us high through we the can I kind of going half the that? appreciate as first Any Is fall second that in move obviously, color. to David, of it stout the one And there progression then color lot was back to for quarter conversions. back any just of quarter around be you is as in through CapEx – half? still you, did and kind going walk the CapEx you the fall the year? way Is of pretty the in a the it

David Schorlemer

about look below actually CapEx incurred around think when you the forecast at our Yes. our Don, at right. that’s came $XX million. significantly I numbers, pretty I in mean

incurred you CapEx CapEx. of recall, had last year million of the We have, as tune to significant $XXX

that was second we off over out diminish will finish as we to the as quarter. begin through begin fourth deliveries of think X will some second quarter go diminish the it I paying to the so during forward, time. Tier The quarter, And that DGB that quarter,

our And will taper expectation. off so is definitely that

Don Crist

Okay. the I appreciate back. turn color. I it will Thanks.

Operator

[Operator ahead. be question Stephen Instructions] Next go Gengaro will of Stifel. from Please

Stephen Gengaro

stand? Two about bit being pricing shaky those everybody. one, basins things you anything morning – there with pricing anything was Good etcetera. I seeing have don’t assets And and any know I about stable versus or we customers along don’t pumping suggest as these or maybe talked if idle confident that the other where prior some from or hard far a prices peaks? but discussions, basin ground pretty you moving lines at as know just and to curious, on do if current do can assets stand I but number, to troughs detail you fairly are Are maybe a where some we conversations specifically is it’s this, I mind, talk in you of know on add levels. you it’s sort prior pressure on

Sam Sledge

pretty one last that simply. answer will I

a pricing below hour still are pumping We basis. XXXX on

high shocks spot at a grinder safely, enough think we weakening. hear any half feel comments operate safety look, by at It safety question, the is I or and is customers the about spot earlier part On from for equipment more fleet customer risk of not equipment system. is numbers of a a to insulation that. is around. put hear of is hey, say take conversations, first to in not nearly floating yet of made risk the some here. It’s market So, our and And there more pricing the a and consistency there little their any stability, forecast and bit about, that of market over It’s a risk. there there lot. enough switch we of that to the customer because the operation yes, would There goes on the great this that customers And and feel. good we thankfully, talk like still small we been operating most available own your we great we price. blue-chip to very they efficiently really it’s working with financial of have continuing that customer that at done are have operational performance, an year. like base extremely think on And a relationships Yes. efficiency. a openly feel And we about value our into puts the And that just system a I to in us volume. confident where macro back that notwithstanding if we about of even job like will this things our the with as to things that, got of evidenced level their

David Schorlemer

Steven, David. is And this

that Just at comments, mean time. complement to get Sam’s we to there add able still I that to are are not this to customers

backlog bifurcation. going And I think something in want are doing them are And not what And so field to of that and There differential only also get to performance still. is where that protect creates to are can’t really transition the that our we ProPetro speaks demand, to crews is value. with continue customers your that and that companies fleet optimize competition you that that when to service more but puts position, in I which think than that the our the our strong the basically are. have assets assets a value a you we customers’ we business,

Stephen Gengaro

you And this you. on one one And I have just from then you sense – fleets Thank the new were a guys fleets a you does on one where do perspective or competitors lease your of And basically know as have purchase. you Great. way. – electric two curious, follow-up, have to think either opposed taken or… your

Sam Sledge

you out there. cut Stephen,

Stephen Gengaro

curious see that what have prove on to you one…? their try to you What just am I done technology.

Sam Sledge

half there again? ask of out a cut the you little it your Stephen, in Hi there. bit you question Can back

Stephen Gengaro

Yes, am am sorry. am traveling. I sorry, I I

you for you arrangement model kind you or assets, are or that the if have newer of they arrangement manufacturers sale-leaseback if have the you the Thank or leasing affecting technology the their would assets. prove pushing do are, still just Just you.

you are front? Just curious that on seeing what

Sam Sledge

doing of with strength them comment on to do I on with is the say can what manufacturers think company, our to we confidence don’t or our technology I our alongside their in and commercially us sheet, theirs. our will based this Yes. that other customers ability our reputation our balance field. and company’s of in us of manufacturers’ ability operate with and their maybe belief the

that to of are of for think we arrangement. couple a this of kind both are just to get – are type we things sides those motivating So,

Stephen Gengaro

Great. color. That’s you fair. for the Thank

Sam Sledge

Stephen. Thanks

Operator

Thank you. This concludes session. our question-and-answer

like I would to remarks. ahead. Sledge back the over turn Mr. go to conference closing for Now, Sam Please

Sam Sledge

Sure. everyone, Thanks today’s joining thanks and Nick, call. on for us

with play oil soon life globe. a on energy and gas As day. we We to are critical remain speak see in to across a great to always, Have you the next part everyday innovative you or either an hope call. our proud quarterly where industry

Operator

you has conference The today’s you. now Thank for concluded. Thank presentation. attending

You may now disconnect.

ProPetro Holding (PUMP) 3 May 232023 Q1 Earnings call transcript